ABC of California-Opposed Prevailing Wage Legislation Signed By Governor

ABC of California expressed their concern and opposition for two bills signed into law Oct. 13 by Gov. Jerry Brown (D) that will expand prevailing wage requirements and drive up the costs of local public and private projects.

One bill, SB-7, will deprive charter cities that don’t subject their local projects to prevailing wages from receiving state construction funding. Brown also signed SB-54, which will expand prevailing wage requirements to certain private oil and gas construction projects.

“SB 54 was clearly a power play by the State Building and Construction Trades Council to extend prevailing wages to private projects," said ABC of California Chairwoman Jodi Nagel. “While they attempted to use safety as the reason for the bill, the reality is the current workforce already was skilled and safe. SB 54 is only likely to increase the cost to extract and refine these products; a cost which will almost certainly be passed on to the consumers.”

SB-7 also will limit state funds to cities that have allowed any public works projects within the last two years that have been done without requiring prevailing wages, making it difficult to complete certain projects.

“SB7 will greatly restrict the ability of cities to spend their tax dollars in the most efficient manner for local construction needs," Nagel said. "Since our members perform work under both scenarios, we know the savings that can be realized when cities are given options to stretch their dollars further. It also benefits our members by enabling a greater amount of construction projects that might not have been possible without the flexibility for cities to choose a wage rate that better represents their local market conditions."

Bakersfield City Manager Alan Tandy estimates the new legislation will cost the city 20 percent more on public works projects for which the city does not currently pay prevailing wages.